Correlation Between Benitec Biopharma and XOMA
Can any of the company-specific risk be diversified away by investing in both Benitec Biopharma and XOMA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Benitec Biopharma and XOMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benitec Biopharma Ltd and XOMA Corporation, you can compare the effects of market volatilities on Benitec Biopharma and XOMA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Benitec Biopharma with a short position of XOMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benitec Biopharma and XOMA.
Diversification Opportunities for Benitec Biopharma and XOMA
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Benitec and XOMA is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Benitec Biopharma Ltd and XOMA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA and Benitec Biopharma is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Benitec Biopharma Ltd are associated (or correlated) with XOMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XOMA has no effect on the direction of Benitec Biopharma i.e., Benitec Biopharma and XOMA go up and down completely randomly.
Pair Corralation between Benitec Biopharma and XOMA
Given the investment horizon of 90 days Benitec Biopharma Ltd is expected to under-perform the XOMA. In addition to that, Benitec Biopharma is 21.61 times more volatile than XOMA Corporation. It trades about -0.03 of its total potential returns per unit of risk. XOMA Corporation is currently generating about -0.21 per unit of volatility. If you would invest 2,560 in XOMA Corporation on September 1, 2024 and sell it today you would lose (21.00) from holding XOMA Corporation or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benitec Biopharma Ltd vs. XOMA Corp.
Performance |
| Timeline |
| Benitec Biopharma |
| XOMA |
Benitec Biopharma and XOMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benitec Biopharma and XOMA
The main advantage of trading using opposite Benitec Biopharma and XOMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benitec Biopharma position performs unexpectedly, XOMA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in XOMA will offset losses from the drop in XOMA's long position.| Benitec Biopharma vs. Bio Path Holdings | Benitec Biopharma vs. Capricor Therapeutics | Benitec Biopharma vs. NextCure | Benitec Biopharma vs. Aileron Therapeutics |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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